It’s Monday morning, and Carlos, CEO of a technology company, reviews his calendar. He has nine meetings with board members this month: two to “align” the digital strategy, two to “review” personnel decisions, one to “validate” the marketing proposal, and the rest to “consult” on routine operational decisions.
Carlos no longer runs the company. He administers it by committee.
The pendulum of oversight
After decades of all-powerful CEOs and decorative boards, many companies have swung to the opposite extreme: hyperactive boards that confuse oversight with substitution. The reaction is understandable. Corporate scandals, family crises, regulatory risks, and multimillion-dollar losses caused by unchecked executive decisions have created a culture of distrust that manifests as obsessive control. The paradoxical result is that, in the attempt to create better governance, executive capacity is destroyed.
The three forms of strategic hijacking
Hijacking by micro-validation. Boards that demand approval for routine operational decisions, turning every executive action into an endless bureaucratic process.
Hijacking by parallel decision-making. Directors who create informal decision-making channels, duplicating and contradicting the CEO’s decisions.
Hijacking by strategic perfectionism. Boards that indefinitely postpone critical strategic decisions because they seek “perfect” information or absolute consensus.
The hidden cost of excessive control
Companies with hyper-controlling boards display predictable symptoms: slow decision-making, loss of executive talent, reduced ability to respond to market opportunities, and — paradoxically — greater exposure to risk through the inability to act quickly. In dynamic markets, where conditions change rapidly and opportunities have short windows, this rigidity can be fatal.
Intelligent oversight versus compulsive control
The effective board does not make operational decisions; it creates the conditions for good operational decisions to be made:
- Define clear boundaries: establish which decisions require board approval and which are fully delegated to the CEO.
- Monitor outcomes, not processes: focus on evaluating results rather than controlling every step of the decision-making process.
- Create early-warning systems: develop indicators that detect problems without needing to approve every decision.
Finding the balance
Where institutional trust is lower and personal relationships matter more, finding the right balance requires additional care:
- Proactive CEO transparency: greater communication toward the board to build trust without sacrificing autonomy.
- Accountability rituals: regular accountability ceremonies that satisfy the need for oversight without paralyzing operations.
- Cultural definition of roles: make explicit how delegation is understood within the specific culture of the company and the family.
To reflect on in your boardroom
- How many of the decisions the board currently makes could be effectively delegated to the CEO?
- Is your CEO spending more time reporting decisions than making them?
- How can you increase effective oversight without diminishing the company’s decision-making agility?
Effective governance is not about making every decision; it is about ensuring that the right decisions are made by the right people at the right time.
P.S. A CEO who needs permission for everything is not a CEO. He is merely a very expensive executor.